Sunday, November 21, 2010

Cost Effective Terrorists

The Terrorists appear to have a strong grasp of the basic economics concept of maximizing marginal product per dollar spent on inputs.  Our problem is that their "product" lowers our overall quality of life.

"In a detailed account of its failed parcel bomb plot last month, Al Qaeda’s branch in Yemen said late Saturday that the operation cost only $4,200 to mount, was intended to disrupt global air cargo systems and reflected a new strategy of low-cost attacks designed to inflict broad economic damage."

“Two Nokia mobiles, $150 each, two HP printers, $300 each, plus shipping, transportation and other miscellaneous expenses add up to a total bill of $4,200. That is all what Operation Hemorrhage cost us,” the magazine said.

It mocked the notion that the plot was a failure, saying it was the work of “less than six brothers” over three months. “This supposedly ‘foiled plot,’ ” the group wrote, “will without a doubt cost America and other Western countries billions of dollars in new security measures. That is what we call leverage.”

So, if the terrorists can pay $4,200 and 18 months of work and cause billions of dollars of pain and trouble, that's a pretty high rate of return.

The Terrorists are pretty honest about their strategy;

"The magazine said that it had adopted a “strategy of a thousand cuts.”

“To bring down America we do not need to strike big,” it said. “In such an environment of security phobia that is sweeping America, it is more feasible to stage smaller attacks that involve less players and less time to launch and thus we may circumvent the security barriers America worked so hard to erect.”

SO HOW DO WE PLAY DEFENSE?   We need to end Facebook and the Internet so that we aren't so interconnected -- fear cannot spread so easily if we are not exposed to the same images and chattering away about the same threats. We need to decentralize back to the old days of "island economies" where we knew what was going on on our block but we didn't know anything about Paris Hilton or other Internet Crazes.

Decentralize power and information and stop herding and the terrorists won't be able to hurt us.  We have centralized power and focal points and this gives them easy access to our imagination.